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Democrats Behind CRA Cover-Up
...Over the past decade, Fannie and Freddie combined to spend a reported $200 million on lobbying and campaign contributions. Now bailing them out may cost taxpayers $200 billion directly, and far more indirectly.

The circle of political back-scratching centered around the theme of affordable housing, which the GSEs marketed heavily. Politicians wanted housing for low-income and poor credit risks, so they used Fannie and Freddie to further that objective, and the GSEs responded with campaign help for those politicians.

In return, politicians resisted reforms. This was demonstrated at a 2004 House hearing, where Rep. Maxine Waters (D.-Calif.) denounced attempts to stiffen oversight and regulation of this duo “so as not to impede their affordable housing mission, a mission that has seen innovation flourish, from desktop underwriting to 100 percent loans.”

“Desktop underwriting” meant undocumented loans. No proof of income or credit history required. And zero down payment. ...

...The GSEs’ major campaign largesse went to well-placed friends in key positions. The top six from 1998 thru 2008, according to the Center for Responsive Politics:

Sen. Chris Dodd (D.-Conn.) $165,400
Sen. Barack Obama (D.-Ill.) $126,349
Sen. John Kerry (D.-Mass.) $111,000
Sen. Robert Bennett (R.-Utah) $107,999
Rep. Spencer Bachus (R.-Ala.) $103,300
Rep. Roy Blunt (R.-Mo.) $ 96,950 ...

...As the Manhattan Institute’s Howard Husock wrote in 2000: “The Senate Banking Committee has estimated that, as a result of CRA, $9.5 billion so far has gone to pay for services and salaries of the nonprofit groups involved.” The left created the system that paid its community organizers very handsomely, thanks to the regulations on the financial community....